Home Sales Expected to Heat Up

While currency fluctuations are not a component of the SSR approach, the slowdown in China and the government’s willingness to devalue the yuan made headlines in the early part of the week. The announcement was a surprise to the market. Many market participants viewed the devaluation as an attempt to boost Chinese companies at the expense of foreign competitors. Foreign companies could be hurt by this devaluation primarily in two ways. One way would be that Chinese products could be less expensive, toughening the competitive landscape. The second way could hurt non-Chinese companies: Any profits they do earn in yuan could now be worth less when converted back to their home currency.